The Tax Advice Network welcomes a new paper published by CFE Tax Advisers Europe. The paper looks at ways to ensure ethical professional judgment across all tax advisers in Europe, irrespective of their status.

The paper is titled: Professional Judgment in Tax Planning – An Ethics Quality Bar for All Tax Advisers – Tax Advisers Europe.

It is Inspired by the central question of ‘if it is legal, is it acceptable?’, and proposes an ethics quality bar based on five key questions that CFE believes all tax advisers should reflect on when preparing tax advice.

The idea being to encourage tax advisers to achieve an appropriate balance between the rights and obligations of taxpayers, avoiding abusive tax planning.

The five questions are:

1 – Is there a genuine economic purpose for the tax planning apart from achieving a tax benefit, either now or in the future?

2 – Are the arrangements artificial or manipulated in a form-over-substance approach to achieve a tax benefit?

3 – Is the tax planning based on interpretations of applicable international and national tax law which are likely to be considered credible by the courts and informed stakeholders?

4 – Would the arrangement be implemented if the relevant tax authority had a full overview of every aspect of the planning?

5 – Are there any other potential reasons why the tax planning could be perceived by policymakers and the general public as abusive?

As has been apparent for some time, the world has changed and official attitudes to tax avoidance (vs tax evasion) have evolved.

Chairman of the Network, Mark Lee notes that “The proposed CFE tax quality bar seems to supplement rather than replace, contradict or overrule the rules on Professional Conduct in Relation to Taxation (PCRT). The Tax Advice Network already requires members to confirm that they abide by the rules on PCRT that have been in force since 2017. These rules are also compulsory for the members of the main accounting and tax bodies who publish and update PCRT”.